This is something I haven’t heard anywhere else yet – with everyone focused on the S&P 500 Head and Shoulders, people have let this fact slip them by: The NASDAQ Index is coming into confluence resistance via the 200 month SMA and the 38.2% Fibonacci Retracement. Let’s take a look:

First – price is quite obviously in a monthly downtrend (lower lows/lower highs; 20 EMA lower than the 50 EMA; price beneath all 3 EMAS) which is the dominant structure until proven otherwise.

Price recently crested gently above the 200 month SMA in June, only to fall back beneath it quite bearishly in July. Look what happened in 2002 when price last interacted meaningfully with the average – we couldn’t get a close beneath this level which marked the end of the bear market at that time.

Now it will be a bad omen if bulls can’t retake price above it.

For now, we’re also inflecting downwards off of the 38.2% Fibonacci Retracement of the 2007 high to the 2009 low which comes in over price at 1,877.

To make matters worse, price formed a ‘spinning top’ bearish reversal candle at this current confluence level just south of 1,900.

If this structure and probability holds, it forecasts a downward move which is in line with the bearish Head and Shoulders daily pattern on the S&P 500.

This is just one more hurdle eager bulls have to overcome – I’m just not sure they can do it.